Legal framework for
Australia's Banking & Finance
Industry
APRA Banking Regulation in Australia
A Guide for Foreign Banks and Fintechs
Australia’s banking sector is regulated by the Australian Prudential Regulation Authority (APRA), oversees the stability and risk management of all authorised deposit-taking institutions (ADIs).
This includes foreign banks operating branches or subsidiaries in Australia.
Key Prudential Standards for Foreign Banks (Branches / Subsidiaries)
Foreign banks must comply with several core APRA standards, including:
CPS 220 – Risk Management
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Requires a formal risk framework covering governance, policies, and reporting. Boards must approve and monitor the framework.
CPS 230 – Risk Operational Management from 1 July 2025
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Sets out comprehensive obligations for banks and financial institutions to manage operational
risk effectively.
CPS 510 – Governance
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Sets out expectations for board composition, independence, committees, and director responsibilities.
APS 110 – Capital Adequacy
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Ensures banks maintain sufficient capital to absorb financial stress.
APS 210 – Liquidity
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Requires adequate liquidity to meet obligations under normal and stressed conditions.
FAR (Financial Accountability Regime)
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Directors and senior executives must be accountable for their areas of responsibility.
Special Considerations for Foreign Banks
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Foreign ADIs must appoint a Senior Officer Outside Australia (SOOA).
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Group-wide risk and governance policies must be adapted to meet APRA’s local expectations.
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APRA requires direct visibility into risk controls, governance decisions, and financial resilience at the local level.
How Wentworth Lawyers & Partners assists foreign banks and fintechs with:
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APRA licence applications and pre-lodgement strategy
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Establishing risk, governance, and compliance frameworks
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Drafting and adapting policies to meet local standards
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Liaising with APRA and providing regulatory audit support
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Advising on board composition and FAR obligations
Start your Australian operations with regulatory confidence.
📧 Contact us at lawclerk@wentworthlaw.com.au | 🌐 www.wentworthlaw.com.au
APRA Licensing Support for Foreign Banks and Fintechs
Operating a banking or financial business in Australia requires formal authorisation from the Australian Prudential Regulation Authority (APRA). Wentworth Lawyers & Partners specialises in guiding foreign banks and fintechs through this rigorous licensing process.
Who Needs an APRA Licence?
Entities seeking to provide:
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Banking services (as Authorised Deposit-taking Institutions or ADIs)
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Insurance products
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Superannuation management (RSE licence)
must obtain an APRA licence before commencing operations in Australia.
APRA Licensing Stages:
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Initial Consultation
Early engagement with APRA is recommended to discuss the applicant’s intentions and licensing path. -
Pre-Application Phase
Outline your business model, governance, and risk frameworks. APRA provides feedback before formal lodgement. -
Formal Application
Submit a comprehensive application including financials, compliance policies, and director qualifications. -
Assessment by APRA
APRA evaluates your capital adequacy, risk management, IT systems, and legal structure. -
Final Decision
If satisfied, APRA grants a licence to operate. Conditions may apply depending on the entity’s risk profile.
Timeline
The process generally takes 6 to 12 months, depending on the complexity and readiness of your application.
Documentation:
Applicants must submit:
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Business plan
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Financial forecasts
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Risk and governance frameworks
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Compliance policies
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Fit and proper assessments for directors/senior officers
How Wentworth Lawyers & Partners provides end-to-end legal and regulatory support, including:
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Strategy and structuring advice
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Preparation of licence application documents
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Liaison with APRA during assessment
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Risk and governance policy development
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Local director and compliance officer advisory
Interested in setting up a financial business in Australia?
We assist you navigate APRA’s requirements with precision and experience.
📧 Contact us at lawclerk@wentworthlaw.com.au | 🌐 www.wentworthlaw.com.au
Preparing Foreign Banks and Fintechs for CPS 230
From 1 July 2025, the Australian Prudential Regulation Authority (APRA) introduces a new standard - CPS 230 Operational Risk Management - setting out comprehensive obligations for banks and financial institutions to manage operational risk effectively.
Preparing Foreign Banks and Fintechs for CPS 230
From 1 July 2025, the Australian Prudential Regulation Authority (APRA)
introduces a new standard - CPS 230 Operational Risk Management - setting out comprehensive obligations for banks and financial institutions to manage operational risk effectively.
Operational Risk & Resilience Advisory (CPS 230, 231, 232, 234, 235)
Building Regulatory-Ready Institutions in Australia
At Wentworth Lawyers & Partners, we support foreign banks and fintechs entering or operating in Australia to meet the evolving demands of the Australian Prudential Regulation Authority (APRA)—with a focus on operational risk, business continuity, and outsourcing compliance.
The CPS 230–235 Regulatory Suite
The upcoming and current prudential standards include:
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CPS 230: Operational Risk Management (Effective 1 July 2025)
Requires institutions to establish a comprehensive framework to identify, assess, and manage operational risks. Includes mandatory business continuity and third-party risk requirements. -
CPS 231: Outsourcing
Governs material outsourcing arrangements. Requires due diligence, contractual protections, and contingency planning. -
CPS 232: Business Continuity Management
Requires identification of critical business operations and testing of continuity plans. -
CPS 234: Information Security
Imposes minimum standards for cyber risk governance, incident response, and security control testing. -
CPG 235: Managing Data Risk (Guidance only)
Advises institutions on governance, quality, security, and risk assessment of data across systems and business functions.
Key Obligations Under CPS 230
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A board-approved Operational Risk Management Framework
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Regular operational risk assessments and control testing
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Formal incident management and notification protocols
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Identification and documentation of critical operations
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Active governance over service providers and outsourced functions
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Local adaptation of group-level policies to meet Australian-specific expectations
Our Legal & Regulatory Services
We support you turn complex APRA obligations into practical, defensible strategies:
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Gap assessments of existing risk frameworks
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Drafting of CPS 230–235 compliant policies
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Business Continuity and Cyber Incident Plans
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Legal review of service provider agreements
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Board and executive training on operational risk governance
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Liaison with APRA and compliance roadmap planning
Why Clients Choose Us
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Deep understanding of APRA’s evolving expectations
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Bilingual advisory for multinational clients
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Strong cross-border insight into aligning global and local compliance
Ready to implement CPS 230–235? Let us assist you in building a compliant and resilient financial business in Australia.
📧 Contact: lawclerk@wentworthlaw.com.au 🌐 Visit: www.wentworthlaw.com.au
APRA Guide for Directors – Banking Sector
The APRA Guide for Directors is a critical resource outlining the roles, responsibilities, and obligations of directors in APRA-regulated banking institutions. It serves as a compliance compass for local boards, especially relevant for foreign bank branches and subsidiaries operating in Australia.
Key Responsibilities of Bank Directors:
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Prudential Oversight: Ensure the bank complies with all applicable APRA prudential standards (e.g., CPS 220, CPS 510).
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Risk Management Leadership: Oversee the implementation of a robust risk management framework. Directors must understand the bank’s material risks.
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Board Composition & Independence: APRA expects diversity in skills and independence to avoid groupthink and promote effective governance.
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Senior Officer Outside Australia (SOOA): Foreign ADIs must appoint a suitable local executive with sufficient authority to liaise with APRA.
Expectations on Governance
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Directors must demonstrate active challenge and independent judgment.
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The board should regularly assess its own performance, committee structure, and the effectiveness of risk oversight.
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APRA places high importance on accountability and documented decision-making, particularly under the Banking Executive Accountability Regime (BEAR) or its successor, FAR.
Board Engagement with APRA
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Directors may be required to attend meetings with APRA and justify the institution’s governance arrangements.
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Proactive, transparent communication with APRA is seen as a marker of sound prudential management.
How Wentworth Lawyers & Partners Can Assist
For foreign banks, navigating APRA’s expectations for board governance requires both local knowledge and cross-border alignment. We provide:
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Local board structuring and compliance advisory
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Director onboarding and training aligned with APRA guidance
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Advice on SOOA and BEAR/FAR compliance
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Governance document preparation and regulatory liaison
Launching or supporting a foreign bank in Australia?
Let us help you build a compliant and effective governance structure from day one.
📧 lawclerk@wentworthlaw.com.au | 🌐 www.wentworthlaw.com.au
Key Advice in Banking & Finance Practice
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Borrowing and Lending for transactions related to loans, credit facilities, and financial arrangements.
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Drafting, reviewing, and negotiating the term sheet, Loan agreement, facility agreement, security agreement, guarantee, and indemnity agreement.
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Banking Regulation for the operation, supervision, and conduct of banks and financial institutions.
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Asset Ownership: Legal aspects related to ownership and transfer of financial assets.
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Insolvency laws concerning financial distress, bankruptcy, and insolvency proceedings.
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The Personal Property Securities laws: Personal property security agreements.
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The application of the Banking Code of Practice in guarantees.
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Representing the parties in dispute from the financing agreement.
Australian Prudential Regulation Authority v Gray [2024] FCA
KOUNIS v WESTPAC BANKING CORPORATION [No 2] [2023] WASCA 185
Human Appeal International Australia v Beyond Bank Australia Ltd (No 2) [2023] NSWSC 1161
Australian Securities and Investments Commission v National Australia Bank Limited (No 2) [2023] FCA 1118
Australian Prudential Regulation Authority v Garrett [2023] FCA 956
Australian Securities and Investments Commission v Commonwealth Securities Limited [2022] FCA 1253
CONNELL v AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED [2023] WASCA 48
Recent cases in banking and finance industry
Banking Code of Practice in Australia
What Foreign Banks Should Know
The Banking Code of Practice is Australia’s customer charter for banking conduct. Developed by the Australian Banking Association (ABA), the Code outlines the obligations of participating banks and the rights of their customers.
Why It Matters
For foreign banks operating in Australia, adopting the Code signals a commitment to transparency, fairness, and ethical standards. It also creates contractual obligations to customers—making compliance both a reputational and legal necessity.
Who the Code Applies To
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Retail and small business customers
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Guarantors
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Banks that voluntarily subscribe to the Code
Services Covered
The Code applies to a wide range of retail banking services, including:
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Transaction and savings accounts
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Credit and debit cards
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Home and personal loans
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Consumer credit insurance
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Payment services and FX
(Excludes certain wholesale and investment products)
Enforceability
For signatory banks, the Code forms part of their contract with customers. Its commitments are legally enforceable and may be relied upon in disputes.
Need advice on integrating the Banking Code of Practice into your local operations ?
📧 lawclerk@wentworthlaw.com.au | 🌐 www.wentworthlaw.com.au
Advice for banking and finance transactions
Wentworth Lawyers & Partners
Address: Wynyard / Martin Place
Level 10, 20 Martin Place Sydney NSW 2000
T: 1300 140 291 / 1300 577 502 admin@wentworthlaw.com.au
our expert advice for banking & finance transactions
Advice in doing financing transactions
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Asset, leasing, and equipment financing.
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Multiple lending loan agreements and Australian Competition and Consumer Commission (ACCC)
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Financing M&A and Security in M&A financing.
Key Advice in practice
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Borrowing and Lending for transactions related to loans, credit facilities, and financial arrangements.
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Drafting, reviewing, and negotiating the term sheet, Loan agreement, facility agreement, security agreement, guarantee, and indemnity agreement.
-
Banking Regulation for the operation, supervision, and conduct of banks and financial institutions.
-
Asset Ownership: Legal aspects related to ownership and transfer of financial assets.
-
Insolvency laws concerning financial distress, bankruptcy, and insolvency proceedings.
-
The Personal Property Securities laws: Personal property security agreements.
-
The application of the Banking Code of Practice in guarantees.
-
Representing the parties in dispute from the financing agreement.
Wentworth Lawyers & Partners
Address: Wynyard / Martin Place
Level 10, 20 Martin Place Sydney NSW 2000
T: 1300 140 291 / 1300 577 502 admin@wentworthlaw.com.au